Retailers, Consumers Are Facing Difficult Times

By Karen Talley

Whether induced by the economy or self-inflicted, retailers’ fourth-quarter results brought front and center issues that will continue to plague the sector well into 2013.

While consumers are modestly increasing spending despite having lower take-home pay, the overall sluggishness of the economy and escalating gasoline prices are countering a higher stock market and housing prices.

U.S. incomes fell the most in two decades in January as higher tax rates kicked in; personal incomes tumbled 3.6% in January, the Commerce Department said Friday. Gross domestic product, a measure of all goods and services produced in the economy, advanced at just a 0.1% annual rate between October and December, the Commerce Department said Thursday.

Despite those numbers, consumer spending inched up 0.1% in January with inflation factored in.

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